Blockchain technology has been with us for quite a while. We most often hear about it, when the topic of cryptocurrencies is being touched. Our feelings about it may differ, from supporting the technological change to being against the high energy consumption it requires to exist. Since blockchain drew the attention of the mainstream we have been bombarded with the news regarding how bad for the environment it is. However, is it totally bad, or is there a way that we can use the technology for the common good?
During the ongoing climate summit COP26, Blockchain for Climate Foundation launched the platform helping countries to achieve their climate goals. BITMO (this is the name of the platform) will allow signatures to the Paris Agreement to issue and exchange CO2 limits easily.
How exactly will it work?
The whole platform is built on the ethereum blockchain and allows to create “Blockchain Internationally Transferred Mitigation Outcomes” which are ERC-1155 Non-Fungible Tokens. Each token is equivalent to one tonne of CO2. When the tokens are created they can be easily transferred to other countries. The whole idea of trading CO2 limits is widely known, when a certain country knows that it will not reach the limit it can sell its share to another country that is willing to exceed the limit. The platform itself will increase the transparency and pace of this procedure.
Does it mean that blockchain is good for the climate?
Not exactly, we will still see great amounts of energy consumed by blockchain algorithms. Nevertheless, the platform shows that the technology has the potential to be implemented in environmental actions. We cannot also forget that there are many projects developing new blockchains, ones that are more efficient and less energy demanding.
Sources:
https://www.blockchainforclimate.org/
https://www.prnewswire.com/news-releases/blockchain-for-climate-foundation-launches-bitmo-platform-at-cop26-301414924.html
What I learned recently is that there are areas that generate electricity both at a cheaper rate (usually far away from people) and the electricity would end up being worse for the environment / too costly to transport or move that energy to more populated areas. In a sense, this energy is being wasted then, as it is not being used efficiently. But now these areas are becoming more popular for bitcoin mining which is essentially using the energy more efficiently and cheaper too. Trading CO2 limits through coins on there blockchain is another example of how far this technology can go and how wide use cases can be.